The US dollar is trading bullish as a brand new week gets underway, supported by the demand for its safe haven status as traders worry about the uncertainties surrounding the next round of fiscal stimulus and challenges in vaccine distribution grow. At the time of writing, the US dollar index DXY is trading around 90.56.

Over the previous week, the US dollar notched up gains of around 0.5% against its major rivals over a prevailing risk-off mood in global markets. For the past few weeks, moves in the greenback have been restricted within a range, ever since it recovered slightly after touching the lowest level seen in three years at the beginning of 2021.

There remains considerable uncertainty among traders on the moves in the US dollar, and whether they will continue in a bearish manner like in 2020 when it lost 7% of its value against other rival currencies. Earlier this year, analysts had forecast a period of continued weakness in the reserve currency on the back of the Fed’s decision to extend its dovish monetary policy for a longer period of time even as the government considers rolling out more fiscal stimulus measures.

However, the dollar is enjoying support as a safe haven currency as the mood in the markets turns cautious as the number of fresh infections continues to climb higher even as the UK confirms the discovery of more contagious strains of coronavirus. Meanwhile, President Biden’s proposed stimulus package has run into some trouble with Republican senators stressing on the need to reduce the size of the package from $1.9 trillion to around $600 billion.